CLEVELAND CHESS ASSOCIATION

Minutes of the Extraordinary General Meeting:

held at St Mary’s Church Hall, (corner of) Green Lane/St Mary’s Walk, Middlesbrough at 7.30 p.m. on Friday, 20th November, 2015.

Present

(Billingham Synthonia) B Callaghan, G Edwards; (Middlesbrough) R Stather, P Ridsdale, S Cole, P Gregory; (Great Ayton) S Keswani, M Hardman, K Harrison, M McLoughlin, P Semp; (Redcar) D Edmunds, D Baillie, M McLoughlin, A Hare, T Loborik, R Moore; (Darlington) W Metcalfe, M Evans, J Garner, G Hewitt, R Gilpin; (Thornaby) B Whitaker, B Ellis, M Creaney; (Westgarth) D Appleyard; and (no club) P Mitcheson.

Apologies: A Killick and S Henderson.

AGENDA

The Chairman, D Baillie opened the meeting. J Garner raised a point of order and asked that the Chairman stand aside on the ground that he had chaired the AGM last July in issue. He was informed that the past Chairman, P Semp had chaired that meeting. J Garner apologised and confirmed that he had not attended this AGM.

The Chairman outlined how the meeting had been called i.e. by notice signed by 10 members (‘the Petitioners’) and served under clause 8.4.4 of the Constitution. The Petitioners’ first proposal (item 4 on the agenda) was to set aside resolution 4.1 of the AGM 2015 on the ground that it was ultra vires. On that assumption, their second proposal (item 5 on the agenda) was in two parts: part 1, that the proceeds of the Ivory Chess Set Fund thereafter be placed in a new trust; and part 2, that the terms of this new trust be discussed and established. Exercising the powers granted to the Executive Committee by clause 8.3 of the Constitution, it proposed items 1, 2 and 3 on the agenda, which would be dealt with initially.

  1. APPROVAL OF EXTRACT BELOW OF MINUTES OF AGM HELD ON 15/7/15 (published in full 5/9/15 on the website):

“ 4.1 P Mitcheson: The Ivory Chess Set Fund (“the Fund”)

The seven-year trust established by resolution passed at the 2008 AGM determines at the conclusion of this meeting. It is necessary that further provision be made and it is proposed:

4.1.1That the proceeds of the bond (maturing on 20/1/2016 in the sum of £15,600 approximately) comprising the Fund be distributed in equal shares (to the nearest pound (£)) as soon as reasonably practicable after 1st February 2016 to each Qualifying Member of the Association as defined in clause 4.1.2 and in accordance with the Distribution Method and Conditions set out in clause 4.1.4…”

[NB: the subsequent provisions of resolution 4.1, which were not material to the purposes of the EGM, may be viewed on the website under, “Draft Minutes of AGM 2015” and found under ‘CCA Mins’].

“Passed (18 for, 7 against, 3 abstentions)

P Mitcheson briefly explained the background to the Ivory Chess set and its sale in November 2007. The original resolution passed at the 2008 AGM that established the trust fund stipulated that its future is determined at the 2015 AGM. This forthcoming event was mentioned at last year’s AGM and the proposer had been giving the matter considerable thought for months.

The wishes of the members on whether or not to sell the chess set were determined by postal ballot i.e. one member, one vote. Obviously, the membership of the Association has changed over the years. Another postal ballot listing all the various possible applications of the money would be impractical. Whatever may be put forward, in all probability, will conflict with other submissions. The fairest method is to attribute an identical vote to each member by giving him an equal share of the money. He can then decide on the purpose to which it is put. For example: some members may belong to clubs that need new equipment; an individual may wish to buy an instructional dvd or subscribe to a chess magazine; the money may help meet the costs to attend a congress the player might otherwise miss; even if a member has nothing particular in mind, provided he stays involved in chess, would subsidise his inevitable membership fees etc.

The money has been held in trust for seven years and it is time for it to be put to use. Disposing of the money as a whole now would prevent destructive elements arising and which would harm the Association. Firstly, the arrival of ‘carpetbaggers’ with an eye on shares in the money would be avoided. Secondly, the formation of alliances between strong clubs to hijack funds for, say, their own club tournaments. Thirdly, the likelihood of perpetual dispute and conflict over how the money is progressively spent. There is a great potential for creating a festering sore if the proposal were not passed. There would certainly be considerable administrative work next season, but it would be worth it in the end.

P Mitcheson invited questions. R Pallister asked if the money could, perhaps, be distributed to clubs rather than to members? P Mitcheson replied that the CCA was an association of individuals and there was no basis for such an approach. To make the point, clubs could have non-members of the CCA as members.

J Boyers queried the proposed arrangements for junior members. P Mitcheson replied that although they did not have voting rights at general meeting, they paid the same subscription as adult members. It would be unwise to hand out cash and cheques to juniors. Financial support to a limited degree was therefore proposed during their minority to keep them involved in chess.

E Lazenby supported the proposal and gave the full background to the sale of the chess set, from the outset. He had been a member of the Executive Committee at the time. The sale had always been on the premise that the proceeds would be for the exclusive benefit of CCA members. It was inconceivable to him that a sale would have been voted for if the money were potentially to be paid out to non-members of the CCA..

R Stather said he had looked through the minutes and could find no reference to this being stipulated before the sale.

P Archer said he would be very disappointed to see the fund dissipated and not put to use in chess activities.

P Mitcheson could not accept that an individual distribution to all CCA members was being compared unfavourably with, say, prize-money being paid out to a few players, many of whom would likely be non-members. No tournament imposed conditions on the spending of prize-money, so how was this keeping the money in chess?

4.2P Mitcheson: If proposal 4.1 is not passed, that there be a postal ballot of Members (excepting Juniors as defined in the Constitution) as at 1st June 2015 on whether or not an equal division of the proceeds of the Ivory Chess Set Fund as described in that proposal shall take place as soon as the necessary practical arrangements can be made.”

Withdrawn by the proposer in consequence of the vote taken on 4.1.”

The Chairman asked that those members present at this EGM and who had also attended the AGM held on 15th July, 2015 comment on the accuracy of the above minutes. P Semp questioned whether the minutes could be considered ahead of the AGM to be held in 2016? The Secretary replied that consideration at a subsequent general meeting was the essential requirement. An AGM was the mandatory meeting that had to take place annually. It seemed particularly appropriate to deal with the relevant extract of the draft minutes now since the business before this meeting related directly to what had transpired. P Semp accepted this point.

The Chairman recorded that there were no objections raised about the accuracy of the minutes set out above.

2. _PROPOSAL FROM THE EXECUTIVE COMMITTEE:

“That the notice served on the Chairman and Secretary on the 23rd October 2015 be declared invalid as it contains a material mis-statement: “The meeting was advised that there was no alternative to returning the Capital sum in its entirety to members. This advice is challenged.

As a consequence of the above the following are tabled.

THE PROPOSALS….”

The Secretary expressed his concern that such a contention could be raised by the 10 petitioners since only 4 of them had attended the AGM. He invited an explanation. R Moore explained that he had been responsible for this particular sentence in the notice served under clause 8.4.4 of the Constitution. It followed from clause 4.1.1 of the proposal at the AGM (which he then read out). It was to identify what was being objected to only. He had not personally attended the AGM. P Mitcheson stated that he had not said there was no alternative to his proposal 4.1. His opinion was that the seven-year trust had not achieved anything and that he had then pointed out, at considerable length, the problems that he foresaw might arise in the future. All the proposals that he had received from other members were on the agenda for the AGM 2015.

The Chairman then read out the following extract from the approved minutes of the AGM 2014:

“It was confirmed that the Ivory Chess Set trust would come to an end in 2015. P Semp explained that the trust had been set up to allow members careful consideration of the application of the money and to avoid a rush into projects that would be regretted later. No formal proposals had yet been received. It would seem sensible for all members to give serious thought to the question and submit their proposals for consideration at next year’s AGM.”

R Stather explained that it was not what the P Mitcheson had said at the AGM 2015, but rather what had been said about the chess set money being for the benefit of members only. Further, R Stather stated that he had questioned John Boyers about why he had voted in favour of proposal 4.1 at the AGM and he had replied that he felt he was given no alternative. R Stather also referred to a communication he had received from Gordon Middlemiss along the same lines. W Metcalfe explained that G Hewitt’s signature on the clause 8.4.4 notice was on behalf of Darlington Chess Club and was as a result of what he had reported about the meeting to his club.

R Stather stated that he was, essentially, proposing a continuation of the trust. P Mitcheson replied that this was not correct. At the Secretary’s request, P Ridsdale read out the following extract from the AGM 2008, when it was resolved:

“That the net proceeds of the sale of the Ivory Chess Set ('the fund') be lodged forthwith in a bank or buildingsociety interest bearing account to be chosen by the Trustees in the joint names of three Members ('the Trustees'), but requiring only the signatures of any two of them for withdrawals upon the trusts:

(i) To use reasonable endeavours to retain the capital value of the Fund as at the date the said account is opened in accordance with the annual retail price index;

(ii) To apply any residual income from the Fund as directed from time to time by the Executive Committee for the objects of the Association as set out in the Constitution at the date hereof; and

(iii) To continue with the said trusts until the Annual General Meeting to be held in 2015 when the future of the Fund shall be reconsidered by the Members UNLESS the Trustees, in their absolute discretion, unanimously agree that this question be placed before the Members at an earlier general meeting, which shall be called upon their written request by the Secretary at the earliest practical date.”

P Mitcheson pointed out that the trustees did not have the power to distribute capital.

J Garner repeatedly requested that the Chairman move the meeting on to discuss proposal 5 on the basis that whatever the argument about ultra vires, was it not accepted that an EGM could be called to set aside, in effect, a valid resolution? J Garner maintained that this had happened in many trade union circles which he attended. The Chairman declined to vary the order of business. He ruled that the agenda had been set by the Executive Committee in response to the notice calling for this meeting. As Chairman he controlled the conduct of the meeting. P Mitcheson did not accept the proposition that it was routine to call EGMs to reverse resolutions previously passed.. What was the point in establishing a protocol for a meeting e.g. publication of notices of the business to be conducted and stipulating a quorum, if there was not agreement under the Constitution to accept decisions so made as binding. To argue otherwise would lead to administrative paralysis. Additionally, P Mitcheson considered that the Petitioners’ challenge was exploiting the decision taken by the trustees to invest the fund in a bond maturing beyond the end of the trust period. The best income return was considered to be the primary duty at the relevant time. Had an instant access account been selected, the distribution would have been carried out immediately after the AGM.

M Hardman suggested that the problem lay with the Constitution. P Mitcheson did not agree and pointed out that the relevant clauses were drawn from established precedents. In particular, in clause 8.4.4 he would refer to the word ‘special’.

The Chairman answered M Evans, who maintained his objections to this stance, which the agenda was set and followed the order of the clause 8.4.4 notice served by the Petitioners.

Withdrawn from a vote by the Chairman on behalf of the Executive Committee as it had been established that the sentence referred to in proposal 2 was not tied to the ultra vires question. Whatever statements had been made at the AGM, they were expressions of opinion.

A short adjournment was called.

3.PROPOSAL FROM THE EXECUTIVE COMMITTEE: that the question raised by PROPOSAL 4 below, i.e. that resolution 4.1 above, passed at the AGM to distribute the ‘Fund’ between qualifying members was ‘Ultra Vires’ and consequently void be referred to independent legal Counsel, to be appointed by agreement between the Chairman and the President at the expense of the Association. Further, that the advice from that Counsel be accepted as final and binding on the matter.

The Association at general meeting cannot decide on the legality of its own actions. No party to an agreement (i.e. the Constitution, resolutions etc to which all members of the Association are mutually bound) can impose its interpretation of words and phrases and their meaning.

If resolution 4.1 is pronounced to be legitimate and ‘intra vires’, then each member of the Association as at 1st June 2015 will have been granted a contingent interest in the Ivory Chess Set Fund thereby. Ultimately, on compliance with the terms prescribed by the resolution a vested interest that the Association would be obliged to pay will arise. There is every quality of an enforceable contract i.e. offer, acceptance (re-joining the Association on or after 1/9/15) and valuable consideration (payment of the £3 subscription then due). No subsequent resolution could vary that contract unilaterally.

M Hardman questioned whether an unincorporated association, short of a dissolution, could return capital to its members. P Mitcheson had no doubts that it could in this instance.

B Ellis complained that he felt his (and B Whitaker’s) proposal placed at 4.20 on the AGM 2015 agenda put it at a disadvantage. At an earlier AGM, possibly under A.O.B., he had been promised a fair hearing by the Chairman at a subsequent date. Even though 4.20 had been passed at the AGM 2015, this had not permitted proposal 4.1 to be effectively countered. The Secretary replied that there had to be an order of business at any general meeting. B Ellis complained that the Chairman had continually directed that his proposal would be reached in due course and refused to advance it in the order of business.

W Metcalfe complained that his club had not had enough notice about the AGM. The club’s secretary had not received an email. The Chairman responded by reading out clause 8.5 of the Constitution and gave a timeline as to the publication of the relevant notices on the website leading up to the AGM 2015. There was no doubt that all necessary procedural requirements had been fulfilled. The absence of alternative proposals was down to the members. W Metcalfe maintained that his club had not had enough time to consider matters. The Secretary reminded him that Darlington Chess Club had submitted a raft of proposals and he remembered discussing some of them over the telephone with W Metcalfe.

W Metcalfe put it to P Mitcheson that he had not consulted his two trustees before laying proposal 4.1 before members at the AGM. P Mitcheson confirmed that he had not done so because it was not the exercise of a trustee power and further, a distribution had not been a trustee power during the seven-year trust.

P Ridsdale challenged the legitimacy of the proposal made by P Mitcheson under clause 4.1 of the Constitution. He believed it should be struck out and his £3 subscription consequently refunded. The clause was read out by the Chairman. His contention was that P Mitcheson was not a chess player under clause 4.1.3 since P Ridsdale could not find a record of any games having been played during the 2014/15 season. The Chairman asked the Secretary if he was a chess player and he answered that he was.

D Edmunds made the observation that the attendance at this EGM was less that at the AGM. The Proposers could take no moral ground.

The Chairman called for a vote on Proposal 3, with the result: for 5 votes, against 15 and 2 abstentions.

With the defeat of the proposal the Chairman read a prepared statement, which is published below.

The meeting was then closed.